News Corp and Telstra agree sale of Foxtel to sports streaming service DAZN for $3.4bn
News Corp and Telstra will sell Foxtel in a $3.4bn deal with global sports streaming giant DAZN, relinquishing control of its entire portfolio of domestic and international sports broadcast rights including cricket, AFL and NRL.
DAZN ? owned by the second-richest man in Britain, Len Blavatnik ? will take a majority stake in the Australian pay television business, including the Kayo and Binge streaming services and the Hubbl set-top box, subject to regulatory approval.
Foxtel?s 4.7m Australian customers should not expect any immediate changes in their subscriptions or pricing as a result of the deal, which is expected to be finalised in the first half of 2025, a spokesperson said.
DAZN, pronounced ?Da-zone?, will take over Foxtel?s array of sports broadcast rights and gain a major foothold in Australia under the deal while delivering major benefits to a struggling Foxtel, according to Dan Barrett, writer for television industry newsletter Always Be Watching.
?In one swoop, DAZN?s been able to come in and just buy up all those big major Australian sports rights,? Barrett said.
DAZN is backed by Ukrainian-born billionaire Blavatnik, who also controls businesses including Warner Music, home to Ed Sheeran, Dua Lipa, and Megan Thee Stallion.
The company focused on European markets when it launched in 2016 but has pushed more into 200 international markets since 2020, most recently with its December purchase of exclusive streaming rights for 2025?s FIFA world cup.
The chief executive of DAZN, Shay Segev, said the Foxtel acquisition would further the company?s ambition to become ?the global home of sport?.
?Australians watch more sport than any other country in the world, which makes this deal an incredibly exciting opportunity for DAZN,? he said.
Foxtel has broadcast deals for AFL, cricket and rugby league and Segev said he hoped to export Australian sports worldwide, with DAZN reporting 300 million monthly customers around the world in 2023.
Foxtel had for decades been a highly lucrative revenue stream for News Corp but the media company had looked to offload the pay television service under competition from growing numbers of streaming services.
Australians have dropped subscriptions to the Foxtel Now streaming service, while flocking to Kayo and Binge, according to disclosures in its August earnings results.
DAZN already streams international sports including European football, boxing and NFL in Australia under a variety of subscription plans and a Foxtel spokesperson said the business was considering bringing DAZN content to its Australian customers in future.
The potential addition of new content would add to Foxtel?s sports offerings at time when its Binge platform is set to lose HBO shows with the launch of Max, the Warner Bros Discovery streaming competitor, in the first half of 2025.
?A giant international sports player coming along is almost a perfect save for Foxtel?s business,? Barrett said. ?It?ll strengthen Foxtel as a sporting product and the future of Foxtel was always going to be sport.?
?In the next couple of years, we?re probably going to see Foxtel drop away a lot of the general entertainment and movies anyway, and just move in a direction of sports.?
The deal will see Foxtel repay outstanding debts of $578 million to News Corp and $128 million to Telstra. News Corp will take a seat on DAZN?s board and gain a 6% stake in the company, while Telstra will take a stake of about 3%.
Under the agreement, Foxtel will continue to be run by its local chief executive, Patrick Delany, who said he was grateful for News Corp?s support to reinvigorate the platform.
?Today?s announcement is a natural evolution for the Foxtel Group,? he said. ?[DAZN] are experts in the sports media business and can play a significant role in supporting Foxtel as the business grows its streaming capabilities.?
